[Federal Register Volume 83, Number 35 (Wednesday, February 21, 2018)]
[Notices]
[Pages 7519-7521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-03451]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82713; File No. SR-GEMX-2018-06]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Port Fees

February 14, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 9, 2018, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Port Fees at Section IV, E to 
indicate those fees are not prorated.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqgemx.cchwallstreet.com/, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to include language 
within the Schedule of Fees at Section IV, E, entitled ``Port Fees'' to 
clarify that the port fees in this section are not subject to 
proration. Today, the Exchange does not prorate the pricing for these 
ports.
Background
    The Exchange previously filed \3\ to: (1) Establish ports and 
gateways that members use to connect to the Exchange with the migration 
of the Exchange's trading system to the Nasdaq INET architecture, and 
(2) amend the Schedule of Fees to adopt fees for those ports and 
gateways. The Exchange established fees for the following connectivity 
options that are available in connection with the Exchange's trading 
system: Specialized Quote Feed (``SQF''),\4\ SQF Purge,\5\ Ouch to 
Trade Options (``OTTO''),\6\ Clearing Trade Interface (``CTI''),\7\ 
Financial Information eXchange (``FIX''),\8\ FIX Drop,\9\ Disaster 
Recovery,\10\ and Market Data Port.\11\ The Exchange proposes to

[[Page 7520]]

add a clarifying sentence to make clear that port fees are assessed in 
full month increments and are not prorated, to avoid any confusion.
---------------------------------------------------------------------------

    \3\ See Securities and Exchange Act Release No. 80649 (May 10, 
2017), 82 FR 22595 (May 16, 2017) (SR-GEMX-2017-07).
    \4\ SQF is an interface that allows market makers to connect and 
send quotes, sweeps and auction responses into the Exchange. Data 
includes the following: (1) Options Auction Notifications (e.g., 
opening imbalance, Flash, PIM, Solicitation and Facilitation or 
other information); (2) Options Symbol Directory Messages; (3) 
System Event Messages (e.g., start of messages, start of system 
hours, start of quoting, start of opening); (4) Option Trading 
Action Messages (e.g., halts, resumes); (5) Execution Messages (6) 
Quote Messages (quote/sweep messages, risk protection triggers or 
purge notifications).
    \5\ SQF Purge is a specific port for the SQF interface that only 
receives and notifies of purge requests from the market maker. 
Dedicated SQF Purge Ports enable market makers to seamlessly manage 
their ability to remove their quotes in a swift manner.
    \6\ OTTO is an interface that allows market participants to 
connect and send orders, auction orders and auction responses into 
the Exchange. Data includes the following: (1) Options Auction 
Notifications (e.g., Flash, PIM, Solicitation and Facilitation or 
other information); (2) Options Symbol Directory Messages; (3) 
System Event Messages (e.g., start of messages, start of system 
hours, start of quoting, start of opening); (5) Option Trading 
Action Messages (e.g., halts, resumes); (6) Execution Messages; (7) 
Order Messages (order messages, risk protection triggers or purge 
notifications).
    \7\ CTI is a real-time clearing trade update message that is 
sent to a member after an execution has occurred and contains trade 
details. The message containing the trade details is also 
simultaneously sent to The Options Clearing Corporation (``OCC''). 
The information includes, among other things, the following: (i) The 
Clearing Member Trade Agreement or ``CMTA'' or ``OCC'' number; (ii) 
Exchange badge or house number; (iii) the Exchange internal firm 
identifier; and (iv) an indicator which will distinguish electronic 
and non-electronically delivered orders; (v) liquidity indicators 
and transaction type for billing purposes; (vi) capacity.
    \8\ FIX is an interface that allows market participants to 
connect and send orders and auction orders into the Exchange. Data 
includes the following: (1) Options Symbol Directory Messages; (2) 
System Event Messages (e.g., start of messages, start of system 
hours, start of quoting, start of opening); (3) Option Trading 
Action Messages (e.g., halts, resumes); (4) Execution Messages; (5) 
Order Messages (order messages, risk protection triggers or purge 
notifications).
    \9\ FIX Drop is a real-time order and execution update message 
that is sent to a member after an order been received/modified or an 
execution has occurred and contains trade details. The information 
includes, among other things, the following: (1) Executions; (2) 
cancellations; (3) modifications to an existing order (4) busts or 
post-trade corrections.
    \10\ Disaster Recovery ports provide connectivity to the 
exchange's disaster recovery data center in Chicago to be utilized 
in the event the exchange has to fail over during the trading day. 
DR Ports are available for SQF, SQF Purge, Dedicated SQF, CTI, OTTO, 
FIX and FIX Drop.
    \11\ Market Data ports provide connectivity to the Exchange's 
proprietary market data feeds, including the Nasdaq GEMX Real-time 
Depth of Market Raw Data Feed (``Depth of Market Feed''), the Nasdaq 
GEMX Order Feed (``Order Feed''), the Nasdaq GEMX Top Quote Feed 
(``Top Quote Feed''), the Nasdaq GEMX Trades Feed (``Trades Feed''), 
and the Nasdaq GEMX Spread Feed (``Spread Feed''). Each of the feeds 
described above, with the exception of the Trades Feed, have 
previously been established as market data offerings of the 
Exchange, and market participants are charged for subscriptions to 
these products. The Trades Feed is a free market data product 
provided to subscribers of at least one of the fee liable market 
data products described above. In connection with the adoption of 
Market Data ports described above, the Exchange further proposes to 
establish the Trades Feed. Market Data ports are available via 
multicast, TCP, or as an intra-day snapshot, except that the intra-
day snapshot option is available solely for the Depth of Market 
Feed, Top Quote Feed, and Spread Feed.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\12\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\13\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest, by clearly specifying in Section IV, E that the Exchange's 
pricing regarding ports is not prorated. The Exchange believes that its 
decision to not prorate these ports is consistent with the Act because 
prorating billing results in complexity and increased costs associated 
with the billing process. The Exchange notes that this proposal does 
not amend the Exchange's current billing practice.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange will uniformly 
assess the fees in Section IV, E to all GEMX Members in a uniform 
manner.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the Exchange 
may clarify that the INET Port Fees in Chapter V, D will not be 
prorated to avoid any misunderstanding. The Exchange notes that adding 
language to clarify that the Exchange will not prorate the INET Port 
Fees in Section V, D does not significantly affect the protection of 
investors or the public interest because there is no substantive change 
to the manner in which the Exchange bills these services. The 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission hereby waives the operative delay and 
designates the proposed rule change as operative upon filing.\18\
---------------------------------------------------------------------------

    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-GEMX-2018-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-GEMX-2018-06. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-GEMX-2018-06 and should be submitted on 
or before March 14, 2018.


[[Page 7521]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-03451 Filed 2-20-18; 8:45 am]
 BILLING CODE 8011-01-P


